thinking like a customer

thinking like a customer

The Multiplier Effect (Part I)

By on August 5, 2009

The more you do something, the better you get at it. We are familiar with this concept in sports and music, because the more you practice, the better you become. The same thing applies in leading your organization to become more customer-centered.

In economics, a multiplier effect describes the degree of change in one variable that is caused by another variable. Geoff Colvin, however, in Talent Is Overrated, writes about a more important multiplier effect concept that was developed at Cornell University in its research into how world-class achievers become better than everybody else. The research focuses on how "a very small advantage in some field can spark a series of events that produce far larger advantages." This advantage becomes the variable that triggers an exponential, rather than linear, improvement in skill that results in the outstanding achievement.

"World-class achievers are driven to improve, but most of them didn't start out that way." Success, in other words, is not from innate talent. Anders Ericsson's study of violinists proved that those who practiced for more hours became more proficient. This isn't difficult to grasp in everyday life, is it? Somehow we must transfer this idea to business and to techniques for continuous improvement with customers. The effect of practice is cumulative.

Colvin writes about Deliberate Practice, which can be understood by analyzing sports, music, games such as chess, and many other aspects of life. It goes far beyond hard work and must be directed at the aspects of any performance that are most important to success. Unlike casual practice (hitting golf balls without studying how to improve, for example), deliberate practice can be challenging because it requires constant feedback and mental concentration. But it works. "More of it equals better performance. Tons of it equals great performance."

Now, transfer that concept to your business. If you are going to get better at something, shouldn't it be related to your customers? But deliberate practice is not automatically built into most organizations' work. It must be structured to give us immediate feedback on how to improve our abilities (not annual performance reviews). It must have a long-term, organization-wide view, not the short-term approach of following one transaction with another. It has to be goal-oriented. It must be driven by a feeling that you can always improve and that must be a core belief that is owned by everyone.

The opportunities are many but the multiplier effect requires commitment. Part II of this post will discuss how your organization can make customer-centricity take off even more quickly than expected. The journey begins, of course, by instilling in your organization the techniques for thinking like a customer. But you will not get better at it unless you practice, so believe in the critical relationship of deliberate practice to extraordinary performance. Without a systematic approach, organizations are reduced to naively counting on customer excellence happening through individual transactions, rather than the exponential outcome produced by the multiplier effect. The source of great performance is not individual deeds, but a culture that believes in and practices customer-centricity.

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